Correlation Between Betonjaya Manunggal and Ateliers Mecaniques
Can any of the company-specific risk be diversified away by investing in both Betonjaya Manunggal and Ateliers Mecaniques at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Betonjaya Manunggal and Ateliers Mecaniques into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Betonjaya Manunggal Tbk and Ateliers Mecaniques DIndonesie, you can compare the effects of market volatilities on Betonjaya Manunggal and Ateliers Mecaniques and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Betonjaya Manunggal with a short position of Ateliers Mecaniques. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betonjaya Manunggal and Ateliers Mecaniques.
Diversification Opportunities for Betonjaya Manunggal and Ateliers Mecaniques
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Betonjaya and Ateliers is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Betonjaya Manunggal Tbk and Ateliers Mecaniques DIndonesie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ateliers Mecaniques and Betonjaya Manunggal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Betonjaya Manunggal Tbk are associated (or correlated) with Ateliers Mecaniques. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ateliers Mecaniques has no effect on the direction of Betonjaya Manunggal i.e., Betonjaya Manunggal and Ateliers Mecaniques go up and down completely randomly.
Pair Corralation between Betonjaya Manunggal and Ateliers Mecaniques
Assuming the 90 days trading horizon Betonjaya Manunggal Tbk is expected to generate 2.66 times more return on investment than Ateliers Mecaniques. However, Betonjaya Manunggal is 2.66 times more volatile than Ateliers Mecaniques DIndonesie. It trades about 0.01 of its potential returns per unit of risk. Ateliers Mecaniques DIndonesie is currently generating about 0.01 per unit of risk. If you would invest 40,300 in Betonjaya Manunggal Tbk on September 2, 2024 and sell it today you would lose (1,100) from holding Betonjaya Manunggal Tbk or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Betonjaya Manunggal Tbk vs. Ateliers Mecaniques DIndonesie
Performance |
| Timeline |
| Betonjaya Manunggal Tbk |
| Ateliers Mecaniques |
Betonjaya Manunggal and Ateliers Mecaniques Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betonjaya Manunggal and Ateliers Mecaniques
The main advantage of trading using opposite Betonjaya Manunggal and Ateliers Mecaniques positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betonjaya Manunggal position performs unexpectedly, Ateliers Mecaniques can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ateliers Mecaniques will offset losses from the drop in Ateliers Mecaniques' long position.| Betonjaya Manunggal vs. Alumindo Light Metal | Betonjaya Manunggal vs. Duta Pertiwi Nusantara | Betonjaya Manunggal vs. Berlina Tbk | Betonjaya Manunggal vs. Asiaplast Industries Tbk |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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